Imposition of Regulatory Duty; Importers approach Supreme Court seeking leave to appeal

KARACHI: The Model Customs Collectorate of Appraisement East has started encashing the bank guarantees submitted by the importers against provisional release of their consignments.

A number of importers were contesting the imposition of Regulatory Duty before the Sindh High Court wherein the court order release of the consignments on submission of bank guarantees until the cases was decided.

Later, the High Court dismissed 121 petitions challenging imposition of regulatory duty with an option for the importers to file appeal by September 10,2015.

Meanwhile, MCC Appraisement East has started drawing the bank guarantees and a sum of Rs300 has been withdrawn while Rs300 million is with the nazir of the court, for which due process has been initiated.

Moreover, another Rs300 million is with the nazir of the court pertaining to consignments imported via MCC Appraisement West and MCC Port Qasim.

Sources said that the importers have approached the Supreme Court of Pakistan and would seek ‘leave to appeal’ on September 14, 2015 along with stay against withdrawal of securities/guarantees.

The Sindh High Court had dismissed as many as 121 petitions filed by iron and steel importers challenging the regulatory duty on the import of several goods vide amendment to SRO 568(I)/2014. These importers had submitted the bank guarantees equivalent to the regulatory duty against the provisional release of their consignments.

Deputy Collector Rana Ali Waheed pursued the case and it was due to his efforts the case was so strong that the High Court dismissed the petitions.

However, Lahore High Court suspended the imposition of Regulatory Duty enforced via SRO 601(I)/2015 effective to the extent of Collectorates falling within the jurisdiction of Lahore High Court.

Resultantly, the importers diverted their shipments to Lahore dry port in order to avoid Regulatory Duty. Sindh High Court in interim order had advised the importers to deposit the differential amount with the Nazir of the Court or submit bank guarantees against provisional release of goods.

The government had imposed regulatory duty ranging 5.0 percent to 15 percent on several items being imported from China under free trade agreement (FTA). The regulatory duty was in excess of already settled duty and taxes.

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